Re: Can you tell me what it means to be an active participant?

Can you tell me what it means to be an active participant?

posted

If you are referring to rental property, You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense.

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IRS Publication 925 page 4 at https://www.irs.gov/pub/irs-pdf/p925.pdf defines active participation.

Active participation.

Active participation isn’t the same as material participation (defined later). Active participation is a less stringent standard than material participation. For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions.